Procurement of 3PL
Services
IN a previous article, we wrote on how companies
are changing and how these changes impact on the logistics
industry. For one, we observed the growing trend towards Òone-stop
shopÓ logistics portfolio as seen in the rise of door-to-door
deliveries even for full container load (FCL) shipments and
in the growing use of the DDP and DDU (INCOTERM 2000) terms
of trade.
In addition to door-to-door type of logistics
service and integrated inbound logistics (to include warehousing,
inventory management and distribution), companies are likewise
demanding value-added services designed for specific requirements
of the individual company. Multinational companies are now
outsourcing most, if not all, of the supply chain requirements
to third-party logistics (3PL).
Given this trend, we have provided below
a discussion on some of the factors and issues involved when
companies procure or negotiate for logistics services.
Logistics Costs of Companies. It is estimated
that logistics cost accounts for 20%-30% of the total purchase
cost of an item. In an average manufacturing firm, the amount
of purchased materials (including logistics costs) accounts
for around 60% of the total turnover of the company. Thus,
if a company is for example able to reduce the logistics cost
by 20%, it will have a savings impact equivalent to approximately
2.4% to 3.6% of the total turnover. If the overall profit
of the company is 10% of the total turnover, the resulting
savings from logistics costs can increase the company’s
profit by 24% to 36%.
When choosing service providers, companies
have varying options on the nature of relationship they want
to maintain with such providers. For logistics services, it
is typical for companies to maintain a collaborative or a
partner type of relationship rather than an arms-length type
of relationship. The common reason for this is that logistics
is a high-risk and high-impact service and, as such, delays
or service failures on the part of the provider may result
in production stoppage or supply shortages.
Negotiating for 3PL Services. Companies normally
go through three phases of negotiation when choosing a service
provider. There is the preparation phase, the meeting phase
and the follow-up phase. The preparation phase is probably
the most important phase for the company because it is during
this time that RFQs or RFPs are prepared. The meeting phase
will normally involve clarifications on the quotations or
proposals submitted and in some instances, bargaining on some
aspects of said quotations or proposals. The follow-up stage
would normally include ensuring that the agreements are implemented
and that suppliers’ performance are regularly evaluated.
Part of the preparation stage also includes
securing market information on the prices and costs of the
services as well as understanding the prospective organization.
When securing information about a supplier’s service,
the following factors will have to be considered:
a) historical costs
b) quotations from other suppliers
c) reference prices
d) pricing and costing trend
e) expert estimate
When assessing a prospective logistics provider,
a company will normally review the supplier’s capabilities
and strategy by looking at the following:
a) technical capabilities
b) financial situation
c) value added services
d) management capabilities
e) business processes
f) compliance and risk standards
g) industrial relations
h) reputation, track record and network
Negotiation Objectives and Strategy. As part
of the company’s strategy, the procurement of 3PL services
will have to be aligned with the overall corporate objectives
and the specific purchasing objectives. The specific purchasing
objectives may refer to lower acquisition costs of services,
extended credit line, decreasing lead time, improving clearance
and delivery time, and the provision for value-added services.
While cost remains the main driver for choosing
a service provider, the increasing scope and complexity of
supply chain services will force companies to take a closer
look and provide importance on factors such as technical and
financial capabilities, technology support (e.g. information
and communication technology solutions), management expertise
and, again, value-added services.
The Challenge for Local Providers. The concept
of integrated logistics has given companies the opportunity
to reduce the cost of logistics. For logistics companies,
providing integrated logistics has resulted in additional
revenue streams as well as savings created from synergies
in the supply chain. For many medium-sized logistics companies,
the challenge now is on improving existing services (standard
forwarding, transport and customs clearance services) and
at the same time establishing additional capabilities for
providing an integrated logistics or supply chain service
for companies engaged in international and domestic trade.
The author is an international trade and
customs consultant, and a licensed customs broker. He is a
regular lecturer on logistics, indirect tax, customs and supply
chain. Please contact aouvero@dlugms.com for your comments.
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Trends in the Logistics
Sector
DURING the PortCalls Cargo Economics Conference
held last Thursday, we made a brief presentation on ÒFlash
Points in the Logistics Industry: What to Watch Out For in
the Coming YearÓ.
Below is a short discussion of our presentation.
The Changing Landscape. In the last few years,
we have seen creeping developments in the logistics sector
which we feel will greatly impact on the industry going forward.
For one, we have witnessed mergers and acquisitions
of large global logistics companies such as DHL and Exel,
Schenker and BaxGlobal, to name a few. Obviously, the main
reason for the merger or acquisition is to maximize on the
strengths of the merging units and to identify synergies for
growing the business even more.
We have also seen the trend toward integrated
supply chain services. The traditional logistics service typically
involves just forwarding and customs clearance services. In
recent years, there has been a rise in door-to-door type of
service even for full container load (FCL) shipments, resulting
in the growing use of the DDP and DDU (INCOTERM 2000) terms
of trade. More than that, companies are partnering with logistics
companies to address supply chain concerns and to provide
additional services such as inventory and warehousing management,
domestic distribution and other value-added services (e.g.
kitting, consolidation and bundling).
Drivers to Change. What are the reasons for
these creeping changes? These are brought about by a confluence
of many factors.
We have seen big business change its mindset
on how it derives profits from operations, which is basically
to focus on cutting business cost and increasing market share.
With increasing competition from both domestic products and
imports, companies can no longer dictate their prices on consumers.
In fact, consumers now dictate the prices based on what is
available in the market, and business must produce and sell
products based on prices acceptable to the intended market.
There is less flexibility in how companies set their selling
prices so that now, the way to increasing profit margin is
to identify cost-saving measures, such as logistics costs,
which typically constitutes 20-30% of the total purchase cost
of a particular product.
Another development is the shift in the supply
chain model for bringing goods to the market. For many companies,
particularly those in the electronics and consumer goods sectors,
products are now sold even before the same are produced. To
illustrate, one can now buy laptops and other electronic products
via the internet and the orders are normally delivered within
30 days. In such transactions, the particular item is only
produced or manufactured once the order is placed and paid
for via the internet. There is much emphasis on ensuring that
goods are manufactured and delivered to the customer within
the agreed timeline or, in other words, ‘just-in-time’.
International trade experts have estimated
that related party transactions constitute at least 60% of
international trade. This means that multinational companies
drive global trade and, as such, the changes in how these
companies conduct their business will likely impact significantly
on the logistics industry. It is now typical for major multinational
companies to source their supply of services and goods on
a regional or global scale. These companies require suppliers
of services and goods to have regional or global presence.
Failing that, logistics companies are automatically disqualified
from providing their services.
How Companies are Adopting. To adopt to increasing
competition and to address the changing demands and requirements
of big business, major logistics companies are either providing
an additional array of services or providing custom-made supply
chain solutions to specific customers. In addition to the
typical end-to-end solutions such as integrated inbound logistics
or door-to-door deliveries, logistics companies have ventured
into providing additional value-added services not only to
maintain their business but to create additional revenue streams
at the same time address demands of particular clients. Among
these value-added services are:
• Warehousing and inventory management
• Vendor hubs /supplier parks
• Customs and trade advisory services
• Transport management
• Kitting, packaging and bundling
Customs and Trade Developments. There have
also been recent developments in the customs and trade front
which we feel will likely impact on the logistics sector in
the coming months and years.
As discussed in a previous article, the forthcoming
implementation of the AsycudaWORLD will definitely change
how logistics companies clear goods with customs. The new
program basically allows online filing and releasing of import
entries with customs, thereby reducing interface with customs
personnel and minimizing processing costs and clearance time.
Similarly, the ongoing implementation of
numerous free trade agreements will affect the regulatory
environment for clearing goods coming from the country’s
trading partners. This will particularly apply on importations
that avail of lower import tariffs.
The author is an international trade and
customs consultant, and a licensed customs broker. He is also
a regular lecturer on logistics, indirect tax, customs and
supply chain. Please contact aouvero@dlugms.com
for your comments
Back to top
Asycuda
WORLD
LAST month, the Bureau of Customs (BoC) announced
it will soon convert the customs automated system into AsycudaWORLD.
The migration to the latest system is in line with the PhP500-million
computerization program of the BoC being implemented by UNISYS,
a global company engaged in the business of providing information
technology services and solutions.
The computerization program will not only involve the use
of the modern version of the Asycuda but will also include
additional applications to address the specific requirements
of customs. BoC is expected to fully implement the new system
early next year.
For the gateway community, what do we expect from the computerization
program? What are the benefits to the trading community?
What is UNCTAD ASYCUDA? The Automated System for Customs
Data (Asycuda) Program was started in the early 1980s under
the auspices of the UNCTAD. The main purpose of the program
is to automate operations of custom administrations worldwide
and to date, it is the leading electronic media providing
the core component of a comprehensive and integrated customs
information system in more than 85 countries. The latest version
today is what is known as AsycudaWORLD.
As a customs business strategy, Asycuda should provide customs
administrations with a system for:
• trade facilitation of legitimate trade by strengthening
customs operational capacity to carry out its revenue and
border control functions through a modern and reliable system;
and
• implementation of harmonized codes, international
standards, simplified procedures and other international standards
and procedures.
Considering the direction towards a global harmonized customs
rules and procedures, Asycuda fits the requirements of most
customs jurisdictions worldwide and provides cost-effective
solutions. More importantly, the system is provided at no
cost, with implementation assistance provided by UNCTAD.
AsycudaWORLD. Officially launched in March 2002, AsycudaWORLD
is the latest version developed by UNCTAD in recognition of
the vast commercial potential of the internet in making international
trade simpler, cheaper and more accessible. The system hopes
to reduce trade transaction costs by applying modern information
technologies, particularly that of the internet.
The latest version is now closer to the objective of making
customs data requirements harmonized and simplified. This
objective is likewise being pushed by the World Customs Organization
(WCO), which is developing a global, harmonized standard data
that uses uniform electronic messages. This standard data,
known as the WCO Customs Data Model, will have a major impact
on the processing of business-to-business, business-to-government
and government-to-government transactions.
Benefits to Customs and the Trading Community. The adoption
of the AsycudaWORLD and other extension applications will
result in major improvements in the following areas:
• Trade Facilitation (internet access, simpler procedures
and documents)
• Revenue and Statistics (post entry audit, data warehouse)
• Law Enforcement (risk management and selectivity functions)
• Standardization and Harmonization (revised Kyoto Convention,
WCO Data Model)
• E-Governance (inter-agency online capability).
Specifically, the customs modernization project will definitely
enhance current day-to-day operations of the BoC involving
import entry lodgment, VRIS, selectivity, bank payment transactions,
electronic manifest system assessment process, and online
releasing. Additional capabilities will include on-line access
to tariffs (e.g. AHTN), data warehousing, statistic and revenue
information, online processing of import licenses, online
public information and messaging, transshipment system and
warehousing system.
On the export transaction side, the current Automated Export
Declaration System (AEDS) will give way to a new export processing
system. Additional system capabilities may include an export
bonds management system and bonded raw materials liquidation
system.
Trade Facilitation and Compliance. The BoC computerization
program is a major development for the trading community.
Once completed and implemented, its impact on importers can
be immediately felt in the area of trade facilitation and
trade compliance. An enhanced online system with simpler procedures
and documents starting with the filing of import entry to
releasing of the imported goods should result in time savings
and lower transactions costs. For the export community, the
same should likewise happen particularly in the area of liquidation
of raw materials and surety bonds.
In terms of trade compliance, a better and more transparent
selectivity system for importations, supported by an enhanced
VRIS system, will simplify the procedures for assessment.
With a better information system, customs should likewise
be able to implement a computer-aided system for risk management
at the border. For the PEA system, the availability of a data
warehouse should enhance its capability for industry, commodity
and account profiling, which is preparatory to the selection
of auditees. By and large, the customs modernization program
should provide great benefits and advantages to legitimate
trade, to the detriment of illicit border transactions.
CAO 3-2006-A:
Implementation and Practical Issues
AS written in last week's article, CAO 3-2006-A seems to
have addressed the immediate concerns of the freight forwarding
industry even if industry leaders have noted that controversies
and implementation issues remain.
On top of the unresolved concerns, new issues have been raised
as a result of the revisions. Obviously, the opposing camps
have varied and differing opi-nions as to the new issuance.
The new rules are more aligned with international best practices
and the freight forwarding industry seems satisfied with the
attempt to provide a "win-win" solution. Customs
brokers' groups, however, have threatened to file cases against
the legality of some of the provisions. Our discussion here
will focus more on the major practical concerns, rather than
the legal issues, arising from the issuance of the new rules.
Filing of Import Entries by Corporations. The main question
for many now is whether the revised rules allow corporations
to still file import entries using their TIN numbers as corporate
broker in the Automated Customs Operating System (ACOS), with
the entries signed by their principal or alternate customs
brokers. The CAO is quite clear on this: Only licensed customs
brokers duly accredited by BOC (as an individual or as partner
of a general professional partnership) may sign the import
and export entries. A contrary opinion is that customs brokerage
corporations should still be allowed to file their import
entries using their principal or alternate brokers based on
the provision that "nothing herein shall be construed
as prohibiting corporations engaged in the business of customs
brokerage to transact business with the bureau pertaining
to shipments of their clients for as long as entries with
supporting documents are duly signed by a licensed accredited
customs broker".
This phrase is, however, qualified by the provision that
import and export entries must be "duly signed by licensed
and BOC accredited customs brokers". Under the revised
rules, the term customs broker refers to "any bona fide
holder of a valid Certificate of Registration/Professional
Identification Card issued by the Professional Regulatory
Board and the Professional Regulation Commission who is accredited
to practice in the Bureau of Customs". The definition
does not refer to a corporate customs broker. Stated otherwise,
a BOC-accredited customs broker is an individual professional
accredited under the present rules. The phrase "to transact
business" may refer to the customs processing of import
and export entries, and not to the signing of such entries.
Given that definition, what will happen now to corporations
previously accredited under the old rules?
TIN Number in the Import Entry. Prior to the passage of Republic
Act 9280 and as provided under the old accreditation system,
corporations (with their principal and alternate customs brokers)
are required to be accredited at each and every customs collection
district. Once accredited by the collection district concerned,
the TIN of the corporation is uploaded to the ACOS before
actual filing of any import entry is allowed. The TIN is a
required field of information when the electronic copy of
the import entry (otherwise known as the Single Administrative
Document or SAD) is filled out at the Entry Encoding Center
operated by the Philippine Chamber of Commerce and Industry.
Without this TIN, corporations are unable to file import entries
under their corporate name using their principal or alternate
customs brokers.
Under the rules provided in CAO 3-2006-A, only individuals
may be accredited and as such, only the TIN of these accredited
individual customs brokers or general professional partnerships
may be uploaded in the ACOS. Considering that corporations
are not allowed to be accredited under the new rules, the
customs accreditations previously issued to these corporations
are deemed to have lapsed or expired and as such, the corporate
TIN uploaded in the ACOS will have to be removed. To date,
however, the TIN of corporations remains in the ACOS.
Rules in Practice. The revised CAO has specific provisions
as to who can be customs brokers in the import and export
entries. And these specific rules refer to individuals and
not to corporations. Unfortunately, while the rules seem to
be clear on who is allowed to sign the import and export entry
as a customs broker, present customs operations still allow
corporations to file their import entries although some ports
have reportedly disallowed the filing of import entries under
the TIN of corporations. Going forward, will customs then
remove the TIN from the ACOS and, if yes, when? Or will customs
still allow corporations to file the import entries, notwithstanding
the contrary provisions in the revised rules?
The CAO provides that existing customs brokerage corporations
may continue to transact "business" with customs,
however, the rules provide that only BOC-accredited customs
brokers may sign the import and export entries. If customs
will allow corporations to continue filing their entries,
what will be the basis for their accreditation? Customs will
have to clarify these seemingly conflicting provisions. In
addition, customs should also issue guidelines as to the apparent
disconnect between the revised rules as against actual practices.
Customs Representatives of Corporations. The revised rules
now allow freight forwarders accredited by the Philippine
Shippers Bureau (PSB) and the Civil Aeronautics Board (CAB)
to employ their own customs representatives to process the
import and export entries signed by the individual customs
broker (or partner of a GPP) who is accredited by BOC. The
same rules, however, only provide for the qualification requirements
of customs representatives employed by customs brokers but
not those employed by freight forwarders. There is also no
specific provision in the revised rules allowing the accreditation
of customs representatives employed by customs brokerage corporations
not accredited by PSB or CAB. There is doubt as to whether
the absence of these specific provisions can be cured by the
issuance of a Customs Memorandum Order.
If not or unless the law is amended, a revised CAO may again
have to be issued soon
Back to top
Risks and Threats
to World Trade
IN our article last August 14, 2006 (RP's Bilateral
and Regional Trade Agreements), we provided an update on the
current state of play of the country's various trade agreements,
with each agreement having its own separate set of trading
rules. We also discussed in brief possible risks and threats
to a free trade market.
In the succeeding paragraphs, we will elucidate more on what
exactly are these threats and risks that may threaten the
free flow of goods and cause disruptions in the company's
supply chain.
Uniform Rules, Varying Interpretations. One bank aptly puts
it, "think global, act local". For those doing customs
and international trade work, this mantra however has become
sort of a nightmare. While international agreements (e.g.
World Trade Organization [WTO] and Asso-ciation of South East
Asian Nations) provided for uniform rules on various global
trade matters such as valuation and classification of goods,
the complexity and technical nature of such rules have resulted
in varying interpretations at the local level. The reasons
are multifarious. For some, it can be poor understanding of
the technical rules. For others, it can be pressure from top
government officials to increase revenues or to protect domestic
industries from the influx of foreign goods.
The increasing use or misuse of valuation and classification
rules on imported goods has indeed become the bane of many
importers. In the Philippines, local industry representatives
are not only allowed by customs to get involved in the valuation
process of imported goods but worse, domestic industry representatives
are allowed access to otherwise confidential information regarding
the imported articles. This is clearly disallowed under existing
Philippine laws and regulations (including the WTO Agreement
on Customs Valuation) and yet, due to political expediency,
this practice has been allowed to continue for many years.
With regard to classification rules, there had been recent
instances when tariff rulings issued by the Tariff Commission
were disregarded by the Bureau of Customs (BoC), again due
to pressures from politically influential domestic industry
groups.
There are many ways for providing legitimate barriers to
trade; for example, by increasing tariff rates within bound
rates, but not by misinterpreting or misapplying existing
rules on valuation or classification against imported articles.
Dumping and Safeguard Measures. Another threat to those importing
various articles, whether raw materials, intermediate products
or finished goods, is the growing use of trade remedy measures
against imported articles. Many local industries have long
been affected by the influx of cheaper and better quality
goods imported from more economically efficient suppliers
located abroad. Some of the local industries have been able
to adjust while others have not. Some others have aggressively
prevented the entry of cheaper goods through the imposition
of safeguard and dumping duties.
Similar to dumping and countervailing measures, safeguard
measures are one of the trade protection measures available
under the WTO. Until recently, safeguards were seldom used
as most governments previously preferred to protect domestic
industries through bilateral negotiations with other countries.
The laws governing dumping and safeguard measures are provided
under the WTO framework particularly to prevent countries
"abusing" their right to protect domestic industries.
These trade remedy measures are not meant simply as a protectionist
measure to be imposed in favor of economically inefficient
domestic producers.
In reality, however, and as shown by recent cases, the imposition
of dumping or safeguard measures has been more of a political
act rather than a decision made from an international trade
perspective.
Customs Audit of FORM D / Rules of Origin. Rules of Origin
(ROO) refer to the laws, rules and regulations of one country
to determine the country of origin of imported goods. In principle,
the origin of the article can affect tariff rate, tariff preference,
safeguards or dumping duty, import quota, admissibility, marking
and, in some countries, procurement by government agencies.
Rules of origin may either be preferential or non-preferential
and there are three basic methods for determining origin.
The growing trade among ASEAN countries has resulted in customs
authorities starting to scrutinize the issuance of preferential
ROO such as the AFTA Form D Certificate. To date, there have
been many instances when the AFTA Form D issued by Philippine
authorities was questioned at the country of exportation (e.g.
Indonesia, Malaysia or Thailand). Similarly, the Philippines
has on many occasions raised issues on the Form D Certificates
issued by other ASEAN countries.
Considering that each free trade agreement will have its
own ROO, shipments covered by preferential rules of origin
must ensure that the grant of preferential rates strictly
qualifies with the origin methods. Failing that, both importers
and exporters run the risk of being penalized for their importations
made over a certain period.
Permits, Labeling and Marking. The WTO and most of the various
trade agreements in effect now also have specific rules governing
the issuance of import/export permits and the proper labeling
and marking of goods traded across international borders.
These rules may vary according to the trade
agreement applicable and depending on the issuing country
or the type of product involved (e.g. specific rules on marking
and labeling for food products and varying import licenses
and permits applying sanitary and phytosanitary measures).
It is not uncommon for national governments now to apply more
stringent rules for the issuance of import permits and licenses
which effectively create technical barriers to trade in favor
of the domestic industry. Again, failure to comply with such
rules many not only cause delay in customs clearance but may
also result in penalties and other sanctions.
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Customs issues on AFTA Form
DIMPORTS or exports among member countries of
ASEAN avail of special tariff rates under the ASEAN Free Trade
Area-Common Effective Preferential Tariff (AFTA-CEPT). To
avail of the special tariff, the article originating from
the ASEAN country must be supported by a Certificate of Origin
(Form D) which certifies that the imported article originated
from the said ASEAN country and that the article is either
(a) wholly produced or obtained from the exporting country
(e.g. mineral and agricultural products); or
(b) the article has at least 40% aggregate content originating
from the exporting country and any other member states of
ASEAN.
These requirements, commonly known as Rules of Origin (ROO),
are provided in detail in the rules and procedures issued
under the AFTA-CEPT framework.
Various Rules of Origin. There are basically two kinds of
ROO, preferential rules and non-preferential rules. Preferential
rules provide for special tariff rates while non-preferential
rules do not grant such preferences but are required for some
other reasons (for example, to prevent the imposition of dumping
or safeguard measures on imports from a least-developing country).
In general, the origin of the article can affect tariff rate,
tariff preference, safeguards or dumping duty, import quota,
admissibility, marking and in some countries, procurement
by government agencies. For preferential ROO, there are many
methodologies for determining whether an article is deemed
to be "originating" from the exporting country and
is qualified to be issued the applicable certificate of origin.
With the proliferation of free trade agreements (FTAs) entered
into by the Philippines and ASEAN with various other countries,
there are now numerous ROO governing each and every FTA. We
have the Form D Certificate of Origin for AFTA as well as
other forms (E, F, G and so on) for the other FTAs. Each of
these FTAs has its own set of rules and methodologies to qualify
for preferential treatment and other privileges.
Customs Issues on Form D. For those in the trading community,
not only are there varying rules of origin but customs authorities
are increasingly subjecting the Certificates of Origin under
greater scrutiny.
For AFTA Form D, customs authorities among ASEAN countries
can raise issues on the imported goods covering such certificate
of origin. One, customs may raise issue on the authenticity
of the document or the signature therein. Customs may also
raise issues as to whether the issuing person is the one duly
authorized under the procedures set forth under the AFTA-CEPT
rules of origin.
Another issue is with regard the costing methodology or calculation
of the 40% ASEAN content. There have been many instances where
Philippine exports to other ASEAN countries were subjected
to audit and verification with regard to qualifications under
AFTA-CEPT. One Philippine exporting company has in fact been
assessed with back taxes and duties due to the findings of
the customs authorities in the other ASEAN country that the
imported article does not qualify under AFTA-CEPT and that
the cost methodology made to qualify for issuance of Form
D Certificate of Origin was improper.
Under such circumstances, what is the proper procedure for
such audits and what is the remedy for the importer or exporter
whose AFTA Form D is under examination?
Procedures for Rejection of Form D. In a situation where customs
authorities have doubts as to the authenticity of the document
or the true origin of the products in question, the proper
procedures as provided in the "AFTA-CEPT Operation Certification
Procedures" are as follows:
(a) The customs authorities of the ASEAN member country, which
rejects the tariff preference under the Form D certificate,
must return the certificate to the issuing authority of the
exporting country within 2 months. The issuing authority must
be duly notified in writing of the grounds for the denial
of tariff preference.
(b) The issuing authority shall issue a detailed and exhaustive
clarification addressing the grounds for denial of tariff
preference raised by the importing country. Once the clarification
is made, the importing country must reinstate the preferential
treatment.
When reasonable doubts remain, the customs authority may request
for a retroactive check at random of the exporter's cost statements
within a six month period, as follows:
(a) The request for retroactive check must be accompanied
by the Form D certificate in question and shall provide the
reasons and additional information as to possible inaccuracy
in the issuance of the certificate.
(b) The issuing authority shall make a response within 3 months,
with the actual process of determining origin of the article
to be made within 6 months. While the issuing authority is
conducting the retroactive check, the importing country may
suspend the provisions on preferential treatment.
(c) Under exceptional cases (when there is systemic fraud
and there is benefit accruing from the verification when compared
to the cost incurred), the importing country may submit a
written request for a verification visit.
When a dispute results from the retroactive check or verification
visit, the importing and exporting countries shall consult
each other before elevating the issue before the ASEAN body.
The writer is an international trade and customs consultant,
and a licensed customs broker. He has an Advance Certificate
in International Purchasing and Supply Management from International
Trade Centre (UNCTAD/WTO) and is an accredited trainer of
Ateneo GSB-CCE. Please contact aouvero@dlugms.com
for your comments.
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